Merck KGaA of Germany has agreed to acquire St. Louis, Mo.-based Sigma-Aldrich Corp. for $17 billion,
Reuters reported.
Descendants of the founder control 70% of Merck, the Reuters report said. The deal will help strengthen Merck's lab-supplies business, which it believes will provide a more steady income stream than its pharmaceuticals business, the article said. Merck's drug-development business has had several recent failures, the report noted.
Ulrich Huwald, an analyst at Warburg, told Reuters, “The fact that [the Merck family] are not taking a big step further into pharma shows that continuous returns on their investment over time are certainly important to the family.”
A
Financial Times
report noted
that although Merck KGaA shares a name and a historic connection with U.S.-based Merck & Co., the two are now separate companies. Germany's Merck holds global rights to the name; outside the U.S. and Canada, the American company is known as MSD, the
FT
article said. The
FT
report noted that the Sigma-Aldrich deal will increase Merck KGaA's presence in the U.S. (Sources: Reuters, Sept. 22, 2014;
Financial Times
, Sept. 23, 2014.)
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